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Exam Scenario (Exam Questions follow the Scenario)

Background

In 2012, you moved from Washington, DC, where you worked at a large democratic-leaning membership organization for years, to return to your Midwestern roots and childhood home: Fredonia, Michigan, a mid-sized city north of Detroit where you grew up in the 1980’s. After President Obama lost re-election to a conservative Libertarian candidate who also carried Michigan, you opted to move back to Michigan to give back to your original community and help your parents as they grew older. Your work as a telecommuting website designer has flourished, and six weeks ago you were elected to the board of a nationally known Michigan-based nonprofit, “MakeWorkMakePeace”. A long-time family friend is the Executive Director of the organization and recommended you for a board position given your background.

Fredonia has seen its share of economic hardship and evolution over the decades since you were a kid, with manufacturing jobs leaving steadily for overseas facilities and the factories being repurposed for computer facilities, communal work spaces and loft spaces for millennials. In the last decade, Fredonia has benefited from a resurgence of ‘60’s-era baby boomers who are moving in their retirement back into the city’s downtown areas, supporting a symphony, a Whole Foods, a rails-to-trails city-wide bike path and multiple aging-in-place specialists (none too soon for the boomers). Nonetheless, many locals are out of work and the homeless shelters and food banks provide services in higher numbers than ever. Adult children of the manufacturing-era workers are leaving Michigan for better jobs, threatening a massive “brain drain” in the state.

MakeWorkMakePeace (“MWMP”) is a state-wide nonprofit established in 1980, the year after a major and historic manufacturer based in Detroit but with multiple factories across Michigan, AllAuto Corporation, moved its headquarters to California. That same year, AllAuto Corporation opened an enormous manufacturing plant just outside San Francisco with a focus on circuit boards, in tandem with the Silicon Valley boom. In a further blow to its original community, AllAuto Corporation additionally moved most of its auto manufacturing jobs from Michigan to Mexico.

Michigan state legislators as well as the public were furious about the corporation’s relocation of headquarters, use of Mexican auto manufacturing plants and placement of a new circuit board plant in California instead of Michigan. To placate the state-wide community and counter what became a media firestorm and PR debacle, AllAuto Corporation established the AllAuto Foundation in Michigan, which in turn established and funded MWMP in Fredonia. AllAuto Foundation convinced other local foundations to join as grant makers, and was intent upon rehabilitating relationships with the state lawmakers as well as countering the public perception that AllAuto “fled” with jobs in tow, leaving Michigan in dire economic straits. MWMP had as its originally stated mission a straightforward purpose: “To enable manufacturing workers of Michigan, and their families for generations to come, to be trained in workplace skillsets for the new economy.”

Eight members of the local Fredonia community, five San Francisco-based executives of AllAuto Company as well as the great-grandson of the founder of AllAuto (also a California resident) comprise MWMP’s board. One Fredonia City Council representative sits ex officio on the board as well. The board chair is the former union leader of Sheetmetal Workers Union Local 101, a union now defunct due to the changing local economy and AllAuto’s relocation of factories. The board meets via conference call two times a year and in person once a year. MWMP and specifically, its six California-based board members, have come under fire by Michigan residents and the local press as having “crossed over” into the California affluent, progressive economic and political sphere, leaving behind its Midwestern, blue collar roots.

With its standard fundraising pitch of “Help us help Michigan workers”, MWMP has an operating budget of $25 million. Its revenue comes from foundation and government grants and individual donations, some of which come from international donors. Over the years, MWMP has been able to accumulate an unrestricted reserve fund of $10M which is invested in an international large cap growth fund; this fund is managed by an MWMP board member who is a partner at a San Francisco-based brokerage firm, serves as MWMP’s investment committee chair, and provides his investment advice to MWMP on a pro bono basis. With the guidance of board members with expertise and business connections in relevant fields, the organization also utilizes the proceeds of various social entrepreneurship businesses it has established to help newly trained workers re-enter the job market in such fields as catering, home construction and solar panel installation. By 2015, roughly 30% of MWMP’s funding was from state and federal government contracts and grants for worker retraining and job placement, with a 5% cap on administrative expenses imposed by the government funders. Its building is an old engine plant, leased from AllAuto Corp. for $1 per year.

MWMP routinely touts itself as a very effective job training and job placement service. An internal evaluation of MWMP conducted in 2010 claimed that 80% of the program participants went on to retain their jobs for 12 months or longer, although a Detroit Free Press op-ed criticized MWMP for placing participants in low-paying, part-time jobs only, in order to inflate its placement numbers. MWMP continues its expansion: since 2010, it has added legal aid services and housing placement to its offered services.

MWMP has good relationships with all political parties both in Michigan and at the federal level, which is important for its revenue stream. Local and state politicians routinely utilize MWMP as an example of all they support in the state for job and economic development, and frequently the Executive Director and her VP of Government Relations host politicians who want to visit MWMP as part of the politicians’ community outreach, as photos on MWMP’s website reflect.

In recent years, MWMP has begun aiding not only state residents, but also immigrants who were moving to Michigan to join family members in the state. The mission statement of MWMP specifically refers to family members of the state’s workers, and the current Executive Director has broadly interpreted the definition of “family”. For some time, there was no internal dissent at MWMP over accepting these individuals seeking Michigan residency into the MWMP programs, as Michigan has a large population of Eastern European and Middle Eastern descent, and enjoys a long history of absorbing tens of thousands of immigrants who sought the once ubiquitous manufacturing jobs for the auto industry. In fact, Detroit has one of the largest Muslim populations in the U.S., and a nearby city is now the first Muslim-majority city in the U.S., with residents hailing from Yemen, Syria, Bosnia, Turkey, Somalia, Iraq and Iran. MWMP now aids immigrants from over 30 countries from around the world as they join family members already living in Michigan. MWMP boasts that they provide on-site translators fluent in seven different languages. The organization has one of the most extensive networks in the entire U.S. for on-the-ground contacts throughout some of the most dangerous regions of the world. Last summer, the CEO took a 10-day trip to Iraq to establish partnerships between MWMP and some local support organizations to aid in the transition of the arrivals. Her son, a senior Arabic major at Middlebury college, joined her on the trip as her translator and posted a steady stream of travel photos with accompanying travelogue during the trip to MWMP’s Twitter feed.

Recent Events

Late last night, you received a call from a reporter at the San Francisco Chronicle alerting you to a forthcoming article in that newspaper, posted on its website in the wee hours this morning and to be distributed in print tomorrow. The reporter is looking for a comment from you and other Michigan-based board members regarding alleged activities of MWMP that were directed and funded by the board of AllAuto Foundation. You race to the Chronicle’s website, just as you get a text from the chair of the MWMP board, asking you to track down your friend, the Executive Director, immediately, and have her call the chair.

The article alleges that in the last two months, when it became clear that the current U.S. President would make good on his promise to “ban foreigners, keep America safe and protect jobs”, a large portion of AllAuto Foundation’s grants were being redirected for immigrant-related activities, to bring into the country as many individuals as possible from those countries on the President’s proposed “immigrant ban” list. The article claims that an anonymous source has confirmed that AllAuto Foundation is determined to “get out ahead” of proposed federal legislation that will ban immigrants entering the US from certain countries as a result of the President’s threatened “Secure America’s Communities” executive order. At the behest of AllAuto Foundation, various of its grantees, including MWMP, have been discovered to be repurposing grant funds in the last few months to enable passage of immigrants who will soon be banned from entering the US, utilizing the nonprofits’ extensive contacts in these countries. The immigrants aided by MWMP come through Fredonia, but they ultimately have moved to various parts of the country in the last months.

The reporter claims that the anonymous source claims to have evidence that “most” of AllAuto Foundation’s current grants are being utilized for “saving” immigrants from their war-torn home countries before the immigrant ban goes into place, and that few of the individuals aided of late have any familial ties to Michigan.

You call your friend who is the Executive Director of MWMP. The ED makes clear that she knew of this situation, of the use of the various grants for the past two months focused on immigrant-related activities and, in fact, enabled them. She indicates that MWMP has emerged as a “flow through” entity in the last two months, redistributing MWMP funds to the many organizations across the soon-to-be-banned countries to enable their residents to flee to the U.S. “It hasn’t been easy”, the ED tells you, but she has managed to distribute hundreds of thousands of dollars in various countries and has hundreds of immigrants now in the US or on their way from the countries that will be the targets of the imminent ban.

Furthermore, the ED gives an impassioned speech on your call about doing the right thing in adverse times, and equating the immigrant-focused activities of MWMP with the civil demonstrations of the 1960’s Civil Rights movement. She says she is proud that MWMP is part of the “Underground Railroad for Global Political Migration”. She states that the focus on immigrant activity – and the use of AllAuto’s grants for such activity-- is a temporary issue, as very soon many of these individuals will be banned from entering the U.S. altogether, hence the “emergency”, in her words.

In addition, she believes that she had the blessing of at least most of the board since all of the San Francisco-based board members, including the relative of AllAuto’s founder, contacted her three months ago and offered additional resources to set up separate administration for these activities. The ED insists that over the course of the fiscal year, she intends that some portion of all of the grants will be used for worker training and placement, just not right away. “This is all just a timing issue, really," she says.

You learn that the ED kept separate computer files for all of the data associated with immigrants in the program. The ED reminds you that only the programs supported by government funds, including contracts and grants, are subject to FOIA (Freedom of Information Act), and this separate and private server is to make sure that she could rebuff any FOIA-like request for those files, which might occur due to government funds MWMP receives. The ED is concerned that federal authorities may ask for the information on immigrants from MWMP just as they have started doing at K-12 schools and universities throughout the country. Her “nightmare” is that these files will be found by the U.S. government and the many immigrants helped by MWMP in the last years will be known to the federal government for its own purposes.

The ED says she had intended to discuss this work fully for the first time with the board at the next regular board meeting, scheduled for two weeks from now. Given the Chronicle’s article, which will be pounced on by the Detroit Free Press and other local press, the ED asks you not to say anything to anyone yet, and she will have a private conversation with the California-based board members, whom she will ask to contact both MWMP’s board chair and communications director. The ED indicates that she and one of the program directors are fully knowledgeable about all of the immigrant-focused activities of the last two months and she is not trying to hide anything, but instead be efficient and keep the grant money moving quickly. One of the board members has an “in” with the Detroit Free Press, and the ED believes that the entire situation will be handled without much fanfare, ultimately.

Although she has nothing in writing, she assures you that the great-grandson of the founder, as well as the other San Francisco-based board members, have all congratulated her on helping Michigan become a “sanctuary state”.

QUESTIONS

For all three questions below, please utilize and reference as appropriate:

a) the ethical analytical framework we have been using throughout the course

Analytical Framework

· What is the organizational context you sit in and your role vis-à-vis that organization?

· What stakeholders are impacted by the ethical dilemma posed and how?

· What are the principles in tension?

· Which principle or stakeholder will you prioritize over another?

· How best to execute a decision as to an ethical course of action?

b) the Independent Sector Principles (available here):

https://independentsector.org/wp-content/uploads/2016/11/Principles2015-Web-1.pdf

Question 1) From the perspective of the new board member, identify as many ethical issues as you find implicated throughout this fact pattern, and VERY BRIEFLY state why each is an issue.

Please specify any assumptions you make or other facts you would need to know as you identify the issues, particularly if you believe a fact in the exam as written is ambiguous.

Question 2) Specify two or more ethical principles that are in tension with each other in the fact pattern and analyze how you, as the new board member, would resolve, and why. Keep in mind that often an issue has more than one possible resolution, so your rationale and reasoning for your conclusion are very important.

Question 3) What actions could have been taken (and by whom) at various junctures throughout the fact pattern to mitigate ethical considerations?

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